Why Do Businesses Create Interim Reports?
Interim reports benefit a company in numerous ways. First, they provide valuable insight into the business’s financial performance.Reading financial statementsallows business owners and managers to gain a comprehensive understanding of their financial position. Interim statements provide this overview at any given time, which can help to monitor performance and improve revenue generation and cash flow to successfully grow the company.
Second, providing interim statements to shareholders, those that have a stake in your company, can grow your business’s credibility in their eyes and secure future investments. When businesses produce these statements for themselves, they should also provide them to any shareholders of the company. As these shareholders are invested in the business, they should have access to its financial information. Reliable quarterly reports can heighten stakeholder confidence in the company and investment capital overall.
Finally, there may be certain legal requirements that dictate businesses must produce interim reports to the government bodies and the public at monthly intervals throughout the tax year. Such interim financial statements, outside of the annual financial statements, may be mandated by the local authorities, so it is important you know what is required of your business.
